Maldives close to free trade agreement with China, India caught unawares
The move comes a little more than a year after the Maldives said it would sign its first FTA with India.
A free trade agreement with China was rushed through the Parliament in the Maldives in the absence of opposition members, who questioned whether the deal was in the best interests of their country.
The FTA, which commits both sides to reduce tariffs on more than 95% of goods to zero, was approved on Wednesday by the Parliament, hours after a cabinet meeting chaired by President Abdulla Yameen decided to sign the deal.
The move, which comes a little more than a year after the Maldives said it would sign its first FTA with India, apparently caught New Delhi unawares and is expected to add to concerns about China’s growing influence in the strategic Indian Ocean nation. India will also be apprehensive the FTA could push the Maldives into a debt trap similar to one affecting Sri Lanka.
According to the Maldives Independent, the FTA was passed with 30 votes from ruling party lawmakers in the 85-member legislature. Opposition lawmakers complained they were not notified of the parliamentary session that ratified the deal. Some said they received text messages about the session after it begun.
The opposition questioned the legitimacy of the fast-tracked process as well as the lack of public disclosure and consultations with the business community.
The opposition also questioned the manner in which an emergency sitting of the parliament was called to send the FTA to the national security committee. The panel completed its review of the deal in a short closed-door meeting and the document was quickly approved at a second impromptu sitting of the Parliament on Wednesday night.
The Maldivian Democratic Party said in a statement:“We are deeply concerned that further entrenchment of the country into a Chinese debt trap will result in additional stress on strategic national assets and increasing instability in the Indian Ocean region.
“The MDP calls on the Government of Maldives to suspend the implementation of the FTA until a proper feasibility study is conducted to ensure the Agreement is in the best interest of the Maldives both economically and also to ensure the Agreement does not place Maldives in a geo- politically vulnerable position.”
Negotiations for the FTA began in late 2015 and concluded in September, but it was not immedately clear when it would be signed.
Economic development minister Mohamed Saeed said the government decided to pursue the deal because the Maldives became ineligible for tariff reductions for fish exports to its largest trading partner, the EU, after it graduated from the status of “least developed country”, the Maldives Independent reported.
The deal will open up the “world’s largest consumer market” to Maldivian fish products and be an “incredible boost” to tourism, he said.
Former president Mohamed Nasheed, currently in self-exile, criticised the deal, saying it would be “detrimental to our economy as balance of trade is greatly in favour of China”.
Saeed said the Maldives has also concluded free trade talks with Hong Kong and will seek FTAs with Japan, the US, the UK and EU, Mihaaru reported.